{"id":25768,"date":"2025-07-21T09:31:20","date_gmt":"2025-07-21T09:31:20","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/25768\/"},"modified":"2025-07-21T09:31:20","modified_gmt":"2025-07-21T09:31:20","slug":"welcome-to-victoria-the-insolvency-state","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/25768\/","title":{"rendered":"Welcome to Victoria: the insolvency state"},"content":{"rendered":"<p>The state of Victoria\u2019s financial woes is well documented.<\/p>\n<p>In 2023-24, the state had the nation\u2019s largest per capita net debt and the lowest credit rating (AA).<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/07\/Victorian-debt-per-capita.png\" width=\"660\" height=\"566\" alt=\"State debt\"\/><\/p>\n<p>Per capita state debt was only $3,600 in Labor\u2019s first budget in 2015. It has since climbed to $21,900 and is projected over the budget forward estimates to hit $25,500 by 2028-29.<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/07\/Victorian-per-capita-debt.png\" decoding=\"async\" loading=\"lazy\"\/><\/p>\n<p>Advertisement<\/p>\n<p>Victoria is currently paying $959 in annual interest costs per capita. By 2028-29, Victoria\u2019s interest bill is projected to hit $1,391 per capita.<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/07\/Victorian-interest-expense-per-capita.png\" width=\"612\" height=\"436\" decoding=\"async\" loading=\"lazy\" alt=\"Interest expense per capita\"\/><\/p>\n<p>The two top international rating agencies, S&amp;P and Moody\u2019s, have warned that if debt levels are not rectified, Victoria\u2019s credit rating may be further lowered.<\/p>\n<p>Advertisement<\/p>\n<p>Further downgrades appear unavoidable, given that the Victorian Budget for 2023-24 specifically stated that it expects the federal government to provide \u201ca matching contribution\u201d to the first stage of its Suburban Rail Loop (SRL) project, which the federal government has declined to fund beyond the previously committed $2.2 billion.<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/07\/SRL-announcement.png\" width=\"660\" height=\"133\" decoding=\"async\" loading=\"lazy\" alt=\"SRL announcement\"\/><\/p>\n<p class=\"wp-caption-text\">Source: Victorian Budget 2023-24<\/p>\n<p>As a result, the Victorian government faces a $9.3 billion financing shortage for the SRL.<\/p>\n<p>Advertisement<\/p>\n<p>When Victoria\u2019s credit rating is downgraded, interest payments on its ballooning debt will increase even more, demanding new tax increases and\/or budget cuts to compensate.<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/07\/Victorian-interest-expense.png\" width=\"625\" height=\"439\" decoding=\"async\" loading=\"lazy\" alt=\"Victorian interest expense\"\/><\/p>\n<p>The Victorian government\u2019s financial woes have spread to businesses across the state.<\/p>\n<p>Advertisement<\/p>\n<p>According to the Australian Securities and Investments Commission (ASIC), Victoria experienced the largest increase in insolvencies among the larger states in the 2024-25 financial year.<\/p>\n<p>As illustrated in the table below, Victoria experienced a 48.2% annual increase in the number of businesses that either collapsed or had a financial controller appointed over the last financial year.<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/07\/Insolvencies-by-state.png\" width=\"660\" height=\"305\" decoding=\"async\" loading=\"lazy\" alt=\"Insolvencies by state\"\/><\/p>\n<p>Advertisement<\/p>\n<p>Victoria\u2019s increase in insolvencies was significantly higher than NSW (22.8%) and Queensland (32.2%), as well as the national average rise (33.1%).<\/p>\n<p>New company registrations per 1000 existing businesses are also significantly lower in Victoria than elsewhere.<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/07\/New-company-registrations.png\" width=\"660\" height=\"349\" decoding=\"async\" loading=\"lazy\" alt=\"New company registrations\"\/><\/p>\n<p>Advertisement<\/p>\n<p>Business investment is also relatively depressed in Victoria, tracking significantly below that of NSW and in line with Queensland, despite Victoria\u2019s substantially larger population and economy.<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/07\/Business-Investment.png\" width=\"660\" height=\"650\" decoding=\"async\" loading=\"lazy\" alt=\"Business Investment\"\/><\/p>\n<p>According to the Property Council of Australia, Melbourne\u2019s CBD office vacancy rate was 18.0% in January 2025, the city\u2019s highest since 1997 and the highest in the nation.<\/p>\n<p>Advertisement<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/07\/Melbourne-office-vacancy-rate.png\" width=\"660\" height=\"399\" decoding=\"async\" loading=\"lazy\" alt=\"Melbourne office vacancy rate\"\/><\/p>\n<p>Finally, Victoria\u2019s unemployment rate is the worst in the nation.<\/p>\n<p><img src=\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/07\/Unemployment-rates-by-state.png\" width=\"660\" height=\"286\" decoding=\"async\" loading=\"lazy\" alt=\"Victorian unemployment rate\"\/><\/p>\n<p>Advertisement<\/p>\n<p>No wonder, then, that Victoria has experienced a sharp rise in business insolvencies.<\/p>\n","protected":false},"excerpt":{"rendered":"The state of Victoria\u2019s financial woes is well documented. In 2023-24, the state had the nation\u2019s largest per&hellip;\n","protected":false},"author":2,"featured_media":25769,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[28,101],"class_list":["post-25768","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/25768","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=25768"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/25768\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/25769"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=25768"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=25768"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=25768"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}